FORM OF SERIES A WARRANT
Exhibit
10.4
FORM
OF SERIES A WARRANT
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES
SALON
CITY, INC.
SERIES
A WARRANT TO PURCHASE ________ SHARES OF COMMON STOCK
(SUBJECT
TO ADJUSTMENT)
(Void
after ________, 2011)
THIS
SERIES A COMMON STOCK PURCHASE
WARRANT CERTIFIES that, for value received, _____________________________
(the
“Holder”), is entitled, upon the terms and subject to
the limitations on exercise and the conditions hereinafter set forth, at
any
time on or after the date hereof (the “Initial Exercise
Date”) or prior to the close of business on ________, 2011 (the
“Termination Date”) but not thereafter, to subscribe
for
and purchase from Salon City, Inc., a Nevada corporation (the
“Company”), up to ________ shares (the
“Warrant Shares”) of Common Stock, $.001
par value per
share, of the Company (the “Common Stock”). The purchase
price of one share of Common Stock (the “Exercise
Price”) under this Warrant shall be $.10, subject to adjustment
hereunder. The Exercise Price and the number of Warrant Shares for
which the Warrant is exercisable shall be subject to adjustment as provided
herein. Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in that certain Subscription Agreement, dated
_______, 2006, between the Company and the Holder (the
“Subscription
Agreement”).
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1.
Title
to Warrant. Prior to the Termination Date and subject to compliance with
applicable laws and Section 7 of this Warrant, this Warrant and all
rights hereunder are transferable, in whole or in part, at the office or
agency
of the Company by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form
and
substance reasonably satisfactory to the Company.
2. Authorization
of Shares. The Company covenants that all Warrant Shares which may be issued
upon the exercise of the purchase rights represented by this Warrant will,
upon
exercise of the purchase rights represented by this Warrant, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens
and
charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
3. Exercise
of Warrant.
(a) Exercise
of the purchase rights represented by this Warrant may be made at any time
or
times on or after the Initial Exercise Date and on or before the Termination
Date by the surrender of this Warrant and the Notice of Exercise Form annexed
hereto duly executed, at the office of the Company (or such other office
or
agency of the Company as it may designate by notice in writing to the registered
Holder at the address of such Holder appearing on the books of the Company),
and
upon payment of the Exercise Price of the Warrant Shares thereby purchased
by
wire transfer or cashier’s check drawn on a United States bank or
internationally recognized bank, the Holder shall be entitled to receive
a
certificate for the number of Warrant Shares so purchased. Certificates for
Warrant Shares purchased hereunder shall be delivered to the Holder within
seven
(7) Trading Days after the date on which this Warrant shall have been exercised
as aforesaid. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the
Holder
or any other person so designated to be named therein shall be deemed to
have
become a holder of record of such shares for all purposes, as of the date
the
Warrant has been properly exercised by payment to the Company of the Exercise
Price and all taxes required to be paid by the Holder, if any, pursuant to
Section 5 have been paid. If such conditions by the Holder have been
met, and the Company fails to deliver to the Holder a certificate or
certificates representing the Warrant Shares pursuant to this
Section 3(a) by the close of business on the 7th Trading Day after
the date of such conditions being met by the Holder, then the Holder will
have
the right to rescind such exercise. In addition to any other rights
available to the Holder, if the Company fails to deliver to the Holder a
certificate or certificates representing the Warrant Shares pursuant to a
proper
exercise, and all conditions being met by the Holder, by the close of business
on the 10th Trading Day after the date of exercise, and if after such 10th
Trading Day the Holder is required by its broker to purchase (in an open
market
transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a
sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall
(1) pay in immediately available funds to the Holder the amount by which
(x) the
Holder’s total purchase price (including brokerage commissions, if any) for the
Warrant Shares so purchased exceeds (y) the amount obtained by multiplying
(A)
the number of Warrant Shares that the Company was required to deliver to
the
Holder in connection with the exercise at issue times (B) the price at which
the
sell order giving rise to such purchase obligation was executed, and (2)
at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver
to
the Holder the number of shares of Common Stock that would have been issued
had
the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total
purchase price of $100 to cover a Buy-In with respect to an attempted exercise
of Warrant Shares with an aggregate sale price giving rise to such purchase
obligation of $80, under clause (1) of the immediately preceding sentence
the
Company shall be required to pay the Holder $20. The Holder shall
provide the Company written notice indicating the amounts payable to the
Holder
in respect of the Buy-In, together with applicable confirmations and other
evidence reasonably requested by the Company. Nothing herein shall limit
a
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance
and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing Warrant Shares as required pursuant to the terms
hereof.
(b) If
this
Warrant shall have been exercised in part, the Company shall, at the time
of
delivery of the certificate or certificates representing Warrant Shares,
deliver
to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant
shall
in all other respects be identical with this Warrant.
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(c) If,
but
only if, at any time after one year from the date of issuance of this Warrant
there is no effective Registration Statement registering the resale of the
Warrant Shares by the Holder, this Warrant may also be exercised at such
time by
means of a “cashless exercise” in which the Holder shall be entitled to receive
a certificate for the number of Warrant Shares equal to the quotient obtained
by
dividing [(A-B) (X)] by (A), where:
(A)
= the Closing Price on the Trading Day preceding the date of such
election;
(B)
= the Exercise Price of the Warrants, as adjusted; and
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(X)
=
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the
number of Warrant Shares issuable upon exercise of the Warrants
in
accordance with the terms of this
Warrant.
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4. No
Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to
any
fraction of a share which Holder would otherwise be entitled to purchase
upon
such exercise, the Company shall pay a cash adjustment in respect of such
final
fraction in an amount equal to such fraction multiplied by the Exercise
Price.
5. Charges,
Taxes and Expenses. Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of
which
taxes and expenses shall be paid by the Company, and such certificates shall
be
issued in the name of the Holder or in such name or names as may be directed
by
the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company
may
require, as a condition thereto, the payment of a sum sufficient to reimburse
it
for any transfer tax incidental thereto.
6. Closing
of Books. The Company will not close its stockholder books or records in any
manner which prevents the timely exercise of this Warrant, pursuant to the
terms
hereof.
7. Transfer,
Division and Combination.
(a) Subject
to compliance with any applicable securities laws and the conditions set
forth
in Section 1 and Section 7(e) hereof and to the
provisions of Section 4.1 of the Purchase Agreement, this Warrant
and all rights hereunder are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay
any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment,
and
shall issue to the assignor a new Warrant evidencing the portion of this
Warrant
not so assigned, and this Warrant shall promptly be cancelled. A Warrant,
if
properly assigned, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.
(b) This
Warrant may be divided or combined with other Warrants upon presentation
hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with
Section 7(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant
or
Warrants in exchange for the Warrant or Warrants to be divided or combined
in
accordance with such notice.
(c) The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this
Section 7.
(d) The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.
(e) If,
at
the time of the surrender of this Warrant in connection with any transfer
of
this Warrant, the transfer of this Warrant shall not be registered pursuant
to
an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as
a
condition of allowing such transfer (i) that the Holder or transferee of
this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel
(which opinion shall be in form, substance and scope customary for opinions
of
counsel in comparable transactions) to the effect that such transfer may
be made
without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable
to
the Company and (iii) that the transferee be an “accredited investor” as defined
in Rule 501(a) promulgated under the Securities Act.
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8. No
Rights as Shareholder Until Exercise. This Warrant does not entitle the
Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the
payment
of the aggregate Exercise Price, the Warrant Shares so purchased shall be
and be
deemed to be issued to such Holder as the record owner of such shares as
of the
close of business on the later of the date of such surrender or
payment.
9. Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction,
of
indemnity or security reasonably satisfactory to it (which, in the case of
the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and
dated
as of such cancellation, in lieu of such Warrant or stock
certificate.
10. Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall be
a
Saturday, Sunday or a legal holiday in the State of California, then such
action
may be taken or such right may be exercised on the next succeeding day not
a
Saturday, Sunday or legal holiday in the State of New York.
11. Adjustments
to Exercise Price and Number of Warrant Shares.
For
purposes of this Section 11, references to Common Stock shall include
shares of Common Stock, par value $.001 of the Company (and any other classes
of
common stock issued by the Company).
(a) Stock
Splits, Etc. The number and kind of securities purchasable upon the exercise
of this Warrant and the Exercise Price shall be subject to adjustment from
time
to time upon the happening of any of the following. In case the Company shall
(i) pay a dividend in shares of Common Stock or make a distribution in shares
of
Common Stock to holders of its outstanding Common Stock, (ii) subdivide its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
of Common Stock, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior thereto shall
be
adjusted so that the Holder shall be entitled to receive the kind and number
of
Warrant Shares or other securities of the Company which it would have owned
or
have been entitled to receive had such Warrant been exercised in advance
thereof. Upon each such adjustment of the kind and number of Warrant Shares
or
other securities of the Company which are purchasable hereunder pursuant
to this
Section 11(a), the Holder shall thereafter be entitled to purchase the number
of
Warrant Shares or other securities resulting from such adjustment at an Exercise
Price per Warrant Share or other security obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares purchasable pursuant hereto immediately prior to such adjustment and
dividing by the number of Warrant Shares or other securities of the Company
resulting from such adjustment. An adjustment made pursuant to this paragraph
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
(b) Anti-Dilution
Provisions. From the Initial Exercise Date until one year
following the Closing Date, the Exercise Price and the number of Warrant
Shares
issuable hereunder and for which this Warrant is then exercisable pursuant
to
Section 1 hereof shall be subject to adjustment from time to time as
provided in this Section 11(b). In the event that any adjustment of
the Exercise Price as required herein results in a fraction of a cent, such
Exercise Price shall be rounded up or down to the nearest cent.
(i) Effect
on Exercise Price of Certain Events. For purposes of determining
the adjusted Exercise Price under Section 11(b) hereof, the following
will be applicable:
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(A) If
at any
time from Closing Date until the first anniversary thereof, the Company shall
grant any warrants to any person or entity with an exercise price which shall
be
less than the Exercise Price, without the consent of each Holder, the Exercise
Price (of the Warrants which have not been exercised) shall be adjusted to
equal
to such lower exercise price.
(B) Exceptions
to Adjustment of Exercise Price. Notwithstanding anything to the contrary
herein, this Section 11(b) shall not apply to the following (1) the
granting of warrants to employees, officers, directors or consultants of
the
Company pursuant to any stock option plan or other written compensatory
agreement, or (2) the issuance of warrants in connection with acquisitions,
joint ventures, arrangements related to the Company’s operations and strategic
relationships, or other strategic investments, the primary purpose of which
is
not to raise capital.
(ii) Minimum
Adjustment of Exercise Price. No adjustment of the Exercise Price shall be
made in an amount of less than 1% of the Exercise Price in effect at the
time
such adjustment is otherwise required to be made, but any such lesser adjustment
shall be carried forward and shall be made at the time and together with
the
next subsequent adjustment which, together with any adjustments so carried
forward, shall amount to not less than 1% of such Exercise Price.
12. Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets. In case
the Company shall reorganize its capital, reclassify its capital stock (other
than as set forth in Section 11), consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where
there
is a change in or distribution with respect to any class of common stock
of the
Company), or sell, transfer or otherwise dispose of all or substantially
all its
property, assets or business to another corporation and, pursuant to the
terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation,
or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights)
in
addition to or in lieu of common stock of the successor or acquiring corporation
(“Other Property”), are to be received by or distributed
to the holders of Common Stock of the Company, then the Holder shall have
the
right thereafter to receive, upon exercise of this Warrant, the number of
shares
of Common Stock of the successor or acquiring corporation or of the Company,
if
it is the surviving corporation, and Other Property receivable upon or as
a
result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a Holder of the number of shares of Common Stock
for
which this Warrant is exercisable immediately prior to such event. In case
of
any such reorganization, reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of
each
and every covenant and condition of this Warrant to be performed and observed
by
the Company and all the obligations and liabilities hereunder, subject to
such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide
for
adjustments of Warrant Shares for which this Warrant is exercisable which
shall
be as nearly equivalent as practicable to the adjustments provided for in
this
Section 12. For purposes of this Section 12,
“common stock of the successor or acquiring corporation”
shall include stock of such corporation
of any class which is not preferred as
to dividends or assets over any other class of stock of such corporation
and
which is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into
or
exchangeable for any such stock, either immediately or upon the arrival of
a
specified date or the happening of a specified event and any warrants or
other
rights to subscribe for or purchase any such stock. The foregoing provisions
of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of
assets.
13. Voluntary
Adjustment by the Company. The Company may at any time during the term of
this Warrant reduce the then current Exercise Price to any amount and for
any
period of time deemed appropriate by the Board of Directors of the
Company.
14. Notice
of Adjustment. Whenever the number of Warrant Shares or number or kind of
securities or other property purchasable upon the exercise of this Warrant
or
the Exercise Price is adjusted, as herein provided, the Company shall give
notice thereof to the Holder, which notice shall state the number of Warrant
Shares (and other securities or property) purchasable upon the exercise of
this
Warrant and the Exercise Price of such Warrant Shares (and other securities
or
property) after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made.
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15. Notice
of Corporate Action. If at any time:
(a) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right
to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock
of any class or any other securities or property, or to receive any other
right,
or
(b) there
shall be any capital reorganization of the Company, any reclassification
or
recapitalization of the capital stock of the Company or any consolidation
or
merger of the Company with, or any sale, transfer or other disposition of
all or
substantially all the property, assets or business of the Company to, another
corporation or,
(c) there
shall be a voluntary or involuntary dissolution, liquidation or winding up
of
the Company;
then,
in
any one or more of such cases, the Company shall give to Holder (i) at least
10
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote
in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case
of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 10
days’
prior written notice of the date when the same shall take place. Such notice
in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution
or
right, the date on which the holders of Common Stock shall be entitled to
any
such dividend, distribution or right, and the amount and character thereof,
and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of
which
the holders of Common Stock shall be entitled to exchange their Warrant Shares
for securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently
given
if addressed to Holder at the last address of Xxxxxx appearing on the books
of
the Company and delivered in accordance with
Section 17(d).
16. Authorized
Shares. The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock
a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant. The Company
further
covenants that its issuance of this Warrant shall constitute full authority
to
its officers who are charged with the duty of executing stock certificates
to
execute and issue the necessary certificates for the Warrant Shares upon
the
exercise of the purchase rights under this Warrant. The Company will take
all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law
or
regulation, or of any requirements of the principal Trading Market upon which
the Common Stock may be listed.
(a) Except
and to the extent as waived or consented to by the Holder, the Company shall
not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms
of this
Warrant, but will at all times in good faith assist in the carrying out of
all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant
against
impairment. Without limiting the generality of the foregoing, the Company
will
(a) not increase the par value of any Warrant Shares above the amount payable
therefore upon such exercise immediately prior to such increase in par value,
(b) take all such action as may be necessary or appropriate in order that
the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to
enable
the Company to perform its obligations under this Warrant.
(b) Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
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17. Piggy-Back
Registration Rights. The Series A Warrant Shares into which this
Series A Warrant are exercisable shall have piggy-back registration rights
and
shall be entitled to be registered and included in any registration statement
filed by the Company on Form SB-2 with the Securities and Exchange
Commission. The cost of such registration shall be borne by the
Company and the Company shall, prior to the effectiveness of such registration
statement, enter into an indemnification agreement to protect the holders
of the
Series A Warrant Shares from liability under the Securities Act of 1933,
as
amended, in an agreement containing customary terms and conditions for a
transaction of this sort.
18. Miscellaneous.
(a) Jurisdiction.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of California without regard to the conflicts
of laws
principles thereof. The parties hereto hereby irrevocably agree that any
suit or
proceeding arising directly and/or indirectly pursuant to or under this
Agreement, shall be brought solely in a federal or state court located in
the
City of Los Angeles, California. By its execution hereof, the parties hereby
covenant and irrevocably submit to the in personam jurisdiction of
the federal and state courts located in the City of Los Angeles, California,
and
agree that any process in any such action may be served upon any of them
personally, or by certified mail or registered mail upon them or their agent,
return receipt requested, with the same full force and effect as if personally
served upon them in Los Angeles, California. The parties hereto waive any
claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with
respect thereto. In the event of any such action or proceeding, the party
prevailing therein shall be entitled to payment from the other party hereto
of
its reasonable counsel fees and disbursements in an amount judicially
determined.
(b) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise
of
this Warrant, if not registered for resale under the Securities Act, will
have
legends imprinted upon any stock certificates evidencing such Warrant Shares
and
the Company will notify its transfer agent of restrictions upon resale imposed
by the applicable state and federal securities laws.
(c) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any
right hereunder on the part of Holder shall operate as a waiver of such right
or
otherwise prejudice Holder’s rights, powers or remedies, notwithstanding all
rights hereunder terminate on the Termination Date. If the Company willfully
and
knowingly fails to comply with any provision of this Warrant, which results
in
any material damages to the Holder, the Company shall pay to Holder such
amounts
as shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant hereto
or
in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) Notices.
Any notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with
the
notice provisions of the Purchase Agreement; provided, upon any permitted
assignment of this Warrant, the assignee shall promptly provide the Company
with
its contact information.
(e) Limitation
of Liability. No provision hereof, in the absence of any affirmative action
by Holder to exercise this Warrant or purchase Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give rise
to any
liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company
or
by creditors of the Company.
(f) Remedies.
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of
its
rights under this Warrant. The Company agrees that monetary damages would
not be
adequate compensation for any loss incurred by reason of a breach by it of
the
provisions of this Warrant and hereby agrees to waive the defense in any
action
for specific performance that a remedy at law would be adequate.
(g) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the
rights and obligations evidenced hereby shall inure to the benefit of and
be
binding upon the successors of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for
the
benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
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(h) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with
the
written consent of the Company and the Holder.
(i) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(j) Headings.
The headings used in this Warrant are for the convenience of reference only
and
shall not, for any purpose, be deemed a part of this Warrant.
[Remainder
of page intentionally left blank]
8
IN
WITNESS WHEREOF,
the Company has caused this Warrant to be executed by its officer thereunto
duly
authorized.
Dated:
___________, 2006
|
|
SALON
CITY, INC.
|
|
|
By:
/s/ Xxxxxx
Xxxxxxxx
|
Name: Xxxxxx Xxxxxxxx
Title: President
HOLDER
Name: __________________________
By:
Name:
Title:
9
NOTICE
OF EXERCISE
To: Salon
City, Inc.
1. The
undersigned hereby elects to purchase ________ Series A Warrant Shares of
Salon
City, Inc. pursuant to the terms of the attached Series A Warrant (only if
exercised in full), and tenders herewith payment of the exercise price in
full,
together with all applicable transfer taxes, if any.
2. Payment
shall take the form of in lawful money of the United States; or
3. Please
issue a certificate or certificates representing said Series A Warrant Shares
in
the name of the undersigned or in such other name as is specified
below:
The
Series A Warrant Shares shall be delivered to the following:
4. Accredited
Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as
amended.
[PURCHASER]
By:________________________
Name:
Title:
10
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute this form and supply required
information.
Do
not
use this form to exercise the warrant.)
FOR
VALUE RECEIVED,
the foregoing Series A Warrant and all rights evidenced thereby are hereby
assigned to
_________________________________________________,
whose address is:
_________________________________________________
_________________________________________________
Dated: ______________ ,
200_
Holder’s
Signature: ___________________
Holder’s
Address: ____________________
Signature
Guaranteed:
_________________________________
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the Series A Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Series A
Warrant.
11
